Engineering Services NAICS 541330

        Engineering Services

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Industry Summary

The 45,700 engineering services firms in the US provide evaluation, investigation, planning, design, and development services related to utilities, structures, buildings, machines, equipment, processes, or systems. Specialty areas include civil, mechanical, industrial, electrical, electronics, computer hardware, aerospace, environmental, chemical, health and safety, materials, petroleum, nuclear, and biomedical engineering. Firms work on specific projects for clients and must be adept at project planning and management.

Dependence on Highly Skilled Personnel

Engineering service firms rely on a highly-educated, professional workforce.

Liability

Work site hazards and the complexity and scale of engineering projects expose engineering services firms to liability.


Recent Developments

Aug 19, 2025 - Construction Stress Index Drops in July, but Remains Elevated
  • Fewer construction projects were paused, abandoned, or delayed in July, according to ConstructConnect’s latest Project Stress Index report. Overall, the index for stressed construction projects declined by 24.3% in July compared to June. Project abandonments fell 37.1%, while projects on hold were down 15.5%, and bid delays fell 4%. However, despite the drop in July, private and public sector project abandonments remain near historic highs. The abandonment portion of the Project Stress Index in July was 14.1% above the 2021 baseline. Year-to-date, overall project stress is up nearly 30% compared to the first seven months of 2024. Higher costs, changes in trade policy, and high interest rates are contributing to the increase in project abandonments.
  • The Dodge Momentum Index (DMI) increased 20.8% in July 2025 to 280.4 (2000=100), up from the revised June reading of 232.1. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which has been shown to lead construction spending for nonresidential buildings by a full year. On a monthly basis, the commercial planning component improved by 14.2% and the institutional component increased by 35.1%. Dodge’s associate director of forecasting, Sarah Martin, said, “Planning data skyrocketed in the month of July on the back of several large projects entering the planning queue for data centers, research & development labs, hospitals and service stations. Combined with more organic momentum in planning for hotels, warehouses, and recreational projects, cumulative activity drove record highs in the DMI. After months of wait-and-see due to tariff uncertainty, owners and developers have begun to move forward with projects and assumed higher costs for them. As economic and fiscal uncertainty remains prevalent, volatility in planning activity will remain elevated.”
  • The Associated Builders and Contractors (ABC) Construction Backlog Indicator rose 0.4 months to 8.8 months in July 2025 compared to a year earlier. July backlogs were also up 0.1 months from June. The infrastructure backlog increased by 2.1 months in July to 9.6 months over the same month a year earlier. July’s commercial and institutional construction backlog increased 0.2 months to 9.2 months year-over-year, but the heavy industrial backlog fell by 6 months to 5.1 months over the same period. The ABC’s Construction Confidence Index for sales fell to 60.4 in July from 62.8 in June. A Confidence Index sales reading of 50 or more indicates most contractors are optimistic about sales. ABC Chief Economist Anirban Basu said, “Backlog continued to rise in July despite the ongoing decline in construction spending. Some of that strength can be attributed to the fact that 1 in every 8 ABC members is currently under contract to perform work on a data center project. Backlog in the infrastructure category has also increased considerably over the past year, and public construction activity has outperformed the private sector over the past several months.”
  • North American construction and engineering spending in 2025 is expected to grow by 1% after increasing an estimated 7% in 2024, according to FMI’s third-quarter 2025 North American Engineering and Construction Outlook. With growth of 32%, the data center sub-sector will lead 2025 nonresidential construction, followed by sewage and waste disposal (7% growth over 2024), amusement and recreation (+6%), water supply (+6%), educational (+4%), and public safety (+4%), power (+3%) and highway and street (+2%). Commercial construction spending is expected to decline 4% in 2025 amid a 4% drop in warehouse demand, which accounts for more than half of annual commercial spending. Lodging construction spending is forecast to fall by 3%, and stubbornly high office vacancies are expected to hold new office construction to 2% growth in 2025.

Industry Revenue

Engineering Services


Industry Structure

Industry size & Structure

A typical engineering services firm operates out of a single location, employs 26 workers and generates around $6.7 million in annual revenue.

    • The engineering services industry consists of about 45,700 companies that employ over 1.2 million workers and generate $305.2 billion annually.
    • Customer industries include general building, transportation, petroleum, power, hazardous waste, water, sewer/waste, industrial, and manufacturing.
    • The engineering services industry is fragmented: The 50 largest firms account for only about 32% of industry revenue.
    • Large companies include Fluor, Bechtel, and AECOM.

                                  Industry Forecast

                                  Industry Forecast
                                  Engineering Services Industry Growth
                                  Source: Vertical IQ and Inforum

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